Arbitration case filings through December 2017 reflected a 6
percent decrease compared to cases filed in 2016 during the same time
frame. More specifically, 3,681 cases
were filed in 2016, but 3,456 cases were filed in 2017. Of the 3,456 cases filed, 65 percent or 2,260
were customer disputes and 35 percent or 1,196 were intra-industry
disputes.

Customer claims decreased by 10 percent from 2016 to
2017. Cases proceeding through FINRA’s
mediation program increased 4 percent from 2016. Approximately 82 percent of these cases
concluded with successful settlements, with the average turnaround time being
105 days. In cases that went to a final arbitration
hearing with a panel, claimants were awarded damages 43% of the time, which was
2 percent more than in 2016.

Panels were more likely to award damages to claimants in cases
that went to final arbitration in 2017 than in 2016. However, it is encouraging to see that
arbitration case filings and customer complaints decreased in 2017, especially
considering the increase in 2016 that disrupted the sustained decrease that has
occurred over the previous few years.

As in years past, mediation and early resolution of
arbitration cases in FINRA continues to be the norm rather than the
exception. Given these statistics, we
continue to emphasize to our broker dealer clients the importance of
supervision and to our registered representative clients the importance of
documentation. Having proper mechanisms
in place for both of these ensures a stronger defense during mediation and
arbitration.